chapter  6
26 Pages

Labour market policy and inequality in the UK: Carole Thornley

ByCAROLE THORNLEY

Orthodox economic analyses of the labour market typically commence with a representative firm in a competitive market with assumed property rights and a direct relationship between desired production and employment levels.There is also a tendency to emphasise ‘commutative justice’, in the sense that the ‘factors of production’, under conditions of free competition, are rewarded on a basis related to the value of their marginal contribution to production (marginal product). On this perspective, and putting to one side the distribution of property rights in ‘capital’ and ‘land’, disparities in income and wealth can be rationalised as consistent with commutative justice, albeit with some concern for those ‘unable to compete’ (Griffiths and Wall 2001: 336-337). This emphasis has undoubtedly marginalised issues of both ‘exploitation’ and ‘distributive justice’ and associated enquiry into ownership, initial endowments, subordination, power, conflict, discrimination and the role, both positive and normative, of institutions.The end result is a dominant economic paradigm in which ‘the subject of income and wealth has not occupied the central position … that one would expect’ (Atkinson 1983: 1).